Risky Business: Buying a Car in Maryland

Auto Fraud and Policy Choices

May 2013

This report documents how yo-yo sales, interest rate mark-ups, rebuilt wrecks and other leading auto sales scams work and their high cost to Maryland consumers.It cites the stories of some of the Maryland families victimized by auto sales fraud and offers concrete policy reforms to help stop the fraud. The report also gives consumers concrete tips on how to avoid getting ripped off when they go to buy a car.

Fighting Yo-Yo Sales Fraud

Each year Maryland consumers lose thousands of dollars to auto dealers who engage in yo-yo scams. In 2015, the Maryland General Assembly voted to make these scams legal but strengthen the consumer protections in the law.

Read more about Yo-Yo Scams here so you can learn what they are. MCRC will be updating this site with information about the new law soon. Check back here for updates.

Here's how Yo-Yo sales work:

A consumer is talked into or unknowingly placed in a conditional-sales contract instead of final sales deal for a car purchase.

Days or weeks later, the dealer tells the consumer the financing deal has fallen through and that he or she will have to pay a higher interest rate, make a larger downpayment, or sign a longer contract to keep the car.

Consumers are sometimes threatened with arrest if they don’t return the car they thought they owned and may learn that the dealer has already sold their trade-in.

Consumers are pushed into signing a new, more expensive contract for the car.

Yo-Yo sales are illegal in Maryland but continue to victimize car buyers with alarming frequency. as state regulators do little to enforce that law. Maryland families lost more than $240,000 to those scams from 2008 to 2012.